In recent years, type 2 diabetes has been recognized as increasingly common among children and adolescents and data from diabetes referral centers indicate that type 2 diabetes now accounts for approximately 40 percent of patients diagnosed with diabetes between the ages of 10-19 years. A number of large epidemiological studies are currently underway to address the question of the true incidence of type 2 diabetes in the pediatric age population. However, despite this increasing incidence of type 2 diabetes among children and adolescents, there have been no large published studies examining the efficacy of potential treatment interventions. Rather, pediatric diabetologists have had to rely on treatment approaches based on the understanding of the pathophysiology of type 2 diabetes, and the results from treatment studies in adult patients. However, the relevance of adult studies to the treatment of type 2 diabetes in adolescents and children is unclear. This proposal aims to address the lack of such studies. Our intent is to participate in a multi-center, randomized, clinical trial to assess the efficacy and safety of potential treatment options for this disorder. We propose a four-arm trial, where participants are randomized to one of the following initial interventions: 1) metformin; 2) intensive lifestyle intervention to promote weight loss and alter diet, physical activity; and behavior patterns; 3) intensive lifestyle intervention plus metformin; 4) insulin. We also propose an approach for stepped-care for patients failing to meet minimum goals for glycemic control in their initial assigned treatment arm. This four-year study will assess the relative efficacy and safety of each of the experimental interventions, examining the primary outcomes of glycemic control and changes in insulin sensitivity and secretion. Associated secondary outcomes will include effects of treatment alternatives on body composition, cardiovascular fitness, cardiovascular risk factors, incidence of diabetes-related complications, as well as patient quality of life. It is anticipated that this trial will provide critical information to guide practitioners in the effective care of these patients, as well as establishing the infrastructure for an ongoing consortium of centers interested in the coordinated study of pediatric type 2 diabetes.